Financing Real Estate in Panama

Panama’s banking center has recently established financing opportunities that now include foreigners. It’s expected that 80 million baby boomers will retire over the next 10 years, with around 5% relocating to Latin America. As a result, the local Panamanian banks are opening their doors and welcoming foreigner financing. Typically Panamanian banks only offer financing towards titled properties where improvements have been made, infrastructure already exists, and the property is located in an urban or developing area.

When comparing financing to the United States to financing in Panama, you will find that the terms and rates are very similar; however, the application process will differ greatly.

In North America financing is all about your credit history whereas in Panama, the banks emphasize your ability to pay as well as the property’s loan to value ratio. As a result, Panamanian banks will require that you provide extensive documentation to prove your income and prove the value of the property that you are buying.

Keep in mind that a foreigner applying for financing in Panama is a tedious process. The mortgage process will require a great deal of document preparation and organization.

Panama banks require these general documents in order to open and account and start the loan process.

  • Photocopy of entire passport including all stamps
  • Photocopy of one additional photo ID
  • Utility bill showing your name and address
  • Personal education and work resume
  • Two original bank reference letters
  • Two original commercial reference letters
  • Last two years of tax returns
  • Letter explaining your income sources & reason for the purchase
  • Appraisal of the property
  • Purchase contract
  • Title deed of the property
  • Completed and signed mortgage application.

Applying for a mortgage will require a considerable amount of personal time, to meet with the bankers, complete the applications, and organize all the documents.